The sentence, unexpected, came late in the evening. The Fitch agency cut Italy's long-term debt rating to BBB-, the last level at which the debt issuer maintains a stable outlook (therefore without the prospect of another rating cut). The downgrade is motivated by the increase in debt and deficit due to the health crisis. The agency forecasts a drop in GDP of 8% this year, with risks of further deterioration, and debt at 156% of GDP.
Fitch's decision, brought forward with respect to the July deadline, came on the eve of today's BTP auction, which however shouldn't present major risks: in the face of the offer of new BTPs and Ccteu for 6 billion, in fact, there are securities maturing and coupons for 16 billion. But the situation, despite the commitment of the ECB, is really worrying, also for the effects on the banks. In 2020, according to Unicredit, Italy must place 360 billion securities in addition to the BOTs. So far it has placed them for 111 billion. A cold shower, in short, which was greeted with irritation by both the Ministry of the Economy and the Bank of Italy. Roberto Gualtieri said that the choice "does not take into account the relevant decisions taken by the EU and the interventions that are about to be implemented with the sharing of responsibilities for managing the response to the crisis and the related financing costs".
THE MARKETS TRUST THE ECB: THE EURO RISES
In fact, Fitch's warning comes 24 hours after the ECB meeting: the increase in firepower of Madame Lagarde's bazooka is inevitable. And the markets, as a consequence, weren't too frightened by the Italian emergency: this morning the euro traded at 1,0848, up slightly (+0,3%) against the dollar.
TRAFFIC BOOM FOR ALPHABET, THUD FOR FORD
Awaiting guidance from the Fed tonight, markets are trying to absorb the many negative shocks, not least the tension on the oil front. YouTube has taken care of restoring some optimism. During the night, the accounts of Alphabet, the parent company of Google, arrived: despite the limited drop in advertising sales, traffic revenues on the network rose by 14%, to 41,2 billion dollars, better than analysts' expectations. due to +33% of YouTube and +52% of the cloud area. The stock gained 7% in the aftermath of a downturn session in the United States, especially the Nasdaq (-1,4%). The Dow Jones moved little (-0,13%), the S&P was weaker (-0,52%).
Down after the stock market Starbucks (-1,7%) and Ford (-6%), held back by the accounts for the quarter.
The spotlight is now on Facebook, Amazon and Apple accounts, arriving tonight.
ASIA RISES, US OIL REBOUNCES
The Asian price lists were positive this morning, reflecting the progress in the fight against the epidemic. Tokyo closed for holidays, the other markets closed the session on positive ground: Shanghai +0,6%, Sydney +1,2%.
WTI Oil rallied to $14 a barrel, up 13% tonight; yesterday the benchmark crude oil from Texas had closed a session of thrilling ups and downs down by 3%, mainly caused by the purchases and sales of financial operators who are trying in every way not to find themselves in the position of having to withdraw oil physical at the expiry of the future. Brent rose by 4% to 21,3 dollars, from +3% yesterday.
MARKET PLACE YESTERDAY THE BEST BAG AGAIN
The European stock markets closed up yesterday, but far from the highs of the session: the slowdown in the last hour was caused by the change of course of Wall Street awaiting the quarterly reports of the hi-tech giants. Banked securities once again dominated the scene. And if it was Deutsche bank who sounded the charge on Monday, yesterday the baton passed to Ubs: +7,05% after net profits up 40%. Good signs in anticipation of tomorrow's meeting of the ECB.
Piazza Affari also benefited from the good performance of the banking sector: Milan, one of the best stock exchanges, closed at +1,71%, at 17.677 points.
The other markets are also positive. Frankfurt gains 1,28%; Paris +1,43%: Madrid +1,59%; London +1,87%.
Zurich +1,41%. Swiss stock index advanced on ABB's 5,18% gain after the engineering firm reported first-quarter results above expectations.
GUALTIERI: MORE CAPITAL FOR COMPANIES WITH THE CDP
Italy is preparing a plan to endow Cassa Depositi e Prestiti (Cdp) with separate assets to help businesses raise capital and strengthen their balance sheets, Economy Minister Roberto Gualtieri said. "We will make CDP able to intervene in support of medium and large companies", explained Gualtieri in a parliamentary hearing.
It is not the only measure to strengthen the capital of companies. "We are working on a plan according to which, for every 100 thousand euros made available by the entrepreneur, the State can add capital up to another 100 thousand", said the Deputy Minister for Economic Development, Stefano Buffagni. “After 5 or 6 years, the state stops being a shareholder but doesn't withdraw its contribution, leaving the company with a higher capitalization,” he added.
BOTS AT SIX MONTHS AT THE HIGHEST SINCE AUGUST 2018
In the morning, the Treasury had placed 10,5 billion euro of BOTs made available with a yield which, in the case of the 6-month bond, rose to 0,227% from 0,055% of the placement at the end of March, reaching the highest since August 2018 .
At 17,30 the yield of the reference ten-year BTP returned to 1,73% from 1,75% at yesterday's close. The yield differential with the Bund of the same maturity remains in the 220 area.
BANKS IN RALLY: INTESA AND UNICREDIT +3,7%
Banks dominated the scene for the second consecutive day: +3,6% for the Ftse Italia Banks index, even +4,5% for the Eurostoxx Banks index.
The purchases are supported by expectations for the ECB meeting on Thursday and by the rumors released yesterday by Reuters: lenders in the euro area may have the possibility of a greater reduction of regulatory capital in order to help companies deal with the crisis caused by the pandemic and avoid a dangerous credit crunch.
But the fact should not be overlooked that the banking sector was practically the only one to have returned to the lows of March, after an initial ephemeral rebound. Despite the leaps of yesterday and today, the picture is still very depressed: -43% Eurostoxx Bank, -38% Ftse Italia Banks compared to -24% of the Ftse Mib.
Intesa Sanpaolo, after the go-ahead for the capital increase for the Ops with Ubi, closed up by 3,7%, at 1,447 euros.
Bper rally (+6,28%). Strong increases also for Unicredit (+3,72%), Mediobanca (+3,43%) and Ubi (+3,42%).
MANAGED RECORD, FINECO THE BEST EUROPEAN TITLE
Asset management is still making marked progress: a shower of purchases on Azimut (+4,29%) and Banca Mediolanum (+4,7%). Also stretches Soul (+1,81%). Finecobank (+2,42%) is the best stock in the Eurostoxx Banks index since the beginning of the year, with a loss of 8,5% which compares with the dramatic -42% recorded by the sector average.
Snam advances (+3,93% to 4,12 euros), on which Kepler Cheuvreux confirmed the buy recommendation and the target price of 4,7 euros. Minister Patuanelli hopes that the company will marry Terna (+0,70%) with a large dowry guaranteed by the CDP. Kepler Cheuvreux confirmed the buy recommendation and the target price at 4,7 euros.
FINCANTIERI CELEBRATES THE GENOA BRIDGE
On the day of completion of the Genoa bridge, Atlantia scores a rise of 4,3%. Fincantieri celebrates the work with a gain of 4,48%.
Among the industrialists, the automotive sector holds: FCA +2,51%, Prelli +1,10%. But Brembo (-2,05%) and Ferrari (-0,75%) lose their shots, on which Jefferies has reduced the recommendation from hold (maintain) to underperform (performance below the market).
Contrasted Leonardo (-0,52%): the company is preparing for the so-called Phase 2 and the restart of other activities (aerostructures, aircraft, helicopters, electronics and cyber).
SCANNERS FLY SAES GETTERS
Among the mid caps, money on Dovalue (+12,46%), Ovs (+6,63%) and Cattolica Assicurazioni (+5,19%).
In the red Ima (-3,22% at 66 euros): Equita Sim has limited its estimates, confirming the hold rating and the target price of 54 euros.
Fly Saes Getters (+6,67%). According to Equita, the company will benefit from the obligation to adopt thermo-scanners in all airports and main railway stations. The Milanese company already produces components for infrared applications for thermo-scanners.
